Feature NHS finances

Farewell to dodging and weaving

BMJ 2007; 334 doi: https://doi.org/10.1136/bmj.39185.650486.DB (Published 26 April 2007) Cite this as: BMJ 2007;334:877
  1. Nicholas Timmins, public policy editor
  1. Financial Times, London
  1. Nick.Timmins{at}FT.com

    The NHS financial framework is changing to a much more business-like, commercial model. Nick Timmins looks at its likely effects

    The past 18 months of headlines about the National Health Service have been dominated by deficits. But even if finance is likely to make fewer headlines after May, when the health department is expected to announce that the service has at least technically broken even, debate about money is not about to go away.

    Indeed, financial management will affect doctors and other health workers every bit as much over the coming years as in the past one—even if this time its expression will not so obviously be about frozen posts, real redundancies, reduced training opportunities, and cancelled or slipped orders for supplies and equipment.

    The whole financial framework of the NHS is changing to a more commercial model, which is likely to remain in place whoever becomes the next prime minister. The changes revolve around the drive towards foundation trust status; the framework around that; and the requirements that Monitor, the foundation trust regulator, will be applying to applicants.

    Balancing the books

    First the framework. Over recent years, several financial fiddles that had allowed the NHS to hide its true financial position have progressively been eliminated. These include capital to revenue transfers, which allowed trusts to eat into their capital to meet annual requirements in order to balance the books. Another is unplanned support—the sort of dodge whereby an NHS organisation in surplus lent money, sometimes literally overnight, to another in deficit so that both sets of books seemed to balance. Planned support has also been stopped, in the sense of formal brokerage sanctioned by health authorities, from one organisation to another.

    These …

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